ROSENBERG: In 2 Paragraphs, Here's Why It's Unfair To Compare Today's Emerging-Market Turmoil To The Meltdown Of The Late '90s

Published 11:19 am, Monday, February 10, 2014

As the Fed tapers its quantitative easing program on its path toward monetary policy normalization, experts fear that capital flows could reverse as interest rates rise. This would cause massive strains in these regions.

Some of the worst hit emerging market economies have seen slower economic growth and rely heavily on external financing.

And now we're hearing constant comparisons between the current turmoil and the 1997 currency crisis in Asia.

"This time around, the countries that have suffered the most have their own specific problems, whether they be political, financial, or economic (inflation). But the problems are not endemic this time around and much more idiosyncratic (the regional stock market saw net outflows of 2.7 billion U.S. dollars last week — the heaviest since February 2011 — on top of 2.6 billion dollars the week before). And the aggregate data are actually less worrisome now compared to that horrible 1997-98 meltdown. For instance:

"The median current account deficit is now 1.1% of GDP versus 2.9% back in 1998-98. The median fiscal shortfall is 2.6% now versus nearly 4% then. Foreign currency debt now makes up 25% of GDP compared to 40% back in the 1997-98 crisis. Foreign exchange reserves are now equivalent to nearly 50% of total external debt (median) which is about to double the level back in 1997-98 (30% of GDP versus 10% back then)."

Rosenberg also points out that we haven't seen the rapid contagion we saw back then. In short, this might not be "your father's emerging market" after all.